The way it works is this: the menu length is how long the menu will play for. This includes any audio and video. So, if you have an audio file that's 5 minutes, and you want to play all of it, the menu length should be 5 minutes.
If your audio or background video is shorter than the menu length, DVD Architect will play silence or black video. However, all animated thumbnails and animated graphics in the menu will loop as necessary to fit in the time specified by the menu length.
BTW, if the menu is not looped, everything stops (no audio, and the background becomes a still).
There was a bug in the beta that made the audio continue to loop forever, even if you didn't have looped checked. This has recently been fixed and will be in the final version.